Although the bottom-line on every invoice doesn't include a breakdown of the many costs incurred when a truck and technician show up at the retail store location, the more retailers and vendors understand about this aspect of the business, the better they can strategize to minimize these costs where possible.
Matt Ashwood, PRSM Member and President of Bonded Filter Co., who participated in the new PRSM Benchmarking Report "Supplier Fleet and Technician Operations and Practices" said the results provided him with direction on lowering costs. "About seven percent of our overhead relates to fuel, lodging and per diem, basically the cost of keeping trucks and technicians out in the field. That's a big number," Matt said, "and understanding what others do to manage those expenses is beneficial for us."
"When we see increases in our expenses it puts pressure on our bottom line. We studied these survey results and made some changes to align our company with the best practices provided in the report. The effort we put in to managing our costs enables us to deliver a cost effective service to our clients."
Here are some key findings from the newest PRSM Association Benchmarking Report "Supplier Fleet and Technician Operations and Practices."
- More than 90 percent of the suppliers use gasoline vehicles. However, 62.5 percent of the suppliers use only gasoline vehicles. Other fuel types might be more economical, depending on factors like distance traveled, percent of city travel vs. highway travel and cost of alternative fuels.
- The maintenance on the vehicles is performed by in-house staff at one-half of the supplier companies. Most companies in this study who service vehicles in-house and purchase parts and supplies in bulk reported higher maintenance costs.
- Suppliers spend more on repairs than on regular maintenance. The average regular maintenance cost for changing oil, filters, etc. for a truck is $1,593 per annum versus the average repair cost of $1,881 per truck annually. The average regular maintenance cost for changing oil, filters, etc. for a van is $1,192 per annum versus $1,377 for repair.
- Suppliers reported increased customer satisfaction and more efficient routing because of the ability to track vehicle location. Sixty-three percent of the suppliers track the real-time location of their fleet.
- Most companies, (i.e., 72 percent) have work that requires technicians to spend less than two nights per month out of town and use hotel accommodation. More than one-half of the suppliers, (i.e., 55 percent) reimburse the technician for actual expenses and 27 percent of the companies compensate the technician by paying a fixed amount per day.
- Only 40 percent of the suppliers have coverage for uninsured / under insured motorists.
Were you surprised by the results of this survey? Like Matt, did you find areas for improvement in the results?